The U.S. Consumer Product Safety Commission (CPSC) fully considers the potential impact of its draft rules on small entities. The CPSC thoroughly reviews its draft rules to assess and take appropriate account of their potential impact on small businesses, small governmental jurisdictions, and small organizations. The CPSC ensures maximum notice to and participation by small entities in its rulemaking process.

Specifically:

1. Whenever a Notice of Proposed Rulemaking (NPRM) is being considered, the CPSC Directorate for Economic Analysis (EC) prepares a preliminary economic assessment of the draft rule. The preliminary economic assessment provides a preliminary regulatory flexibility assessment that includes a description of the small entities that might be affected by the proposed rule, an estimate of the economic impact of the proposed rule by size of entity category, and the staff's assessment of whether the rule is likely to have a significant economic impact on a substantial number of small entities². This assessment is provided to the Commission as part of a staff briefing package that contains the information developed by the CPSC staff that is pertinent to the proposed rule. The Commission uses this information in its consideration of what action to take with respect to the merits of the proposal.

2. If the preliminary regulatory flexibility assessment concludes that the draft rule may have a significant economic impact on a substantial number of small entities, and the Commission elects to issue an NPRM, then the preamble to the NPRM will include a discussion of that impact. In this case, the CPSC will prepare and make available for public comment an initial regulatory flexibility analysis (IRFA) in accordance with 5 U.S.C. § 603. The IRFA will describe the reasons the agency is considering the proposed rule; the objectives and legal basis for the proposed rule; the number of small entities to which the proposed rule will apply; the projected reporting, recordkeeping, and other compliance requirements of the proposed rule; the comparative effectiveness and costs of alternative regulatory options; and relevant federal rules that may duplicate, overlap, or conflict with the proposed rule. The CPSC will make a special effort to ensure that adequate opportunity is provided for small entities to comment on the NPRM. As required by 5 U.S.C. § 609 (a) in this instance, opportunity for comment by small entities, and others, will be provided by one or more of the following, as appropriate, in addition to publication of the NPRM in the Federal Register: placing the NPRM on the Commission's world wide web site, directly notifying small entities of the NPRM, publishing the NPRM in publications likely to be obtained by small entities, or by conducting public meetings about the proposed rule. If the preliminary economic assessment concludes that the proposal will not have a significant economic impact on a substantial number of small entities, then the preamble to the NPRM will include a discussion of the basis for that conclusion and a certification by the Commission that the rule, if published in final form as proposed, will not have a significant economic impact on a substantial number of small entities.

3. When the NPRM is published in the Federal Register, the Commission will submit a copy of the NPRM and the initial regulatory flexibility analysis or statement of basis and certification of no significant impact, as applicable, to the U.S. Small Business Administration's (SBA's) Office of Advocacy for comment. The NPRM will invite comments to be submitted from all parties, including small entities.

4. If the Commission votes to continue rulemaking and directs the staff to develop a final rule, then the CPSC EC staff will prepare a final regulatory flexibility analysis or final statement of basis for a Commission certification of no significant impact, as appropriate, taking into account comments received from all parties, including small entities and SBA's Office of Advocacy. If a draft final regulatory flexibility analysis (FRFA) is prepared, it will be done in accordance with section 604(a) of the Regulatory Flexibility Act and will include a succinct statement of the need for, and the objectives of, the final rule; a summary of significant issues raised by the public comments in response to the IRFA, an assessment by CPSC staff of those issues, and a statement of any changes made to the proposed rule as a result of such comments; a description and an estimate, if available, of the number of small entities to which the final rule will apply or an explanation of why no such estimate is available; a description of the projected recordkeeping, reporting, and other compliance requirements of the rule; and a description of the steps the agency has taken to minimize the significant economic impact on small entities consistent with the stated objectives of applicable statutes, including a statement of the factual, policy, and legal reasons for selecting the alternative adopted in the final rule and why each of the other significant alternatives to the final rule considered by the agency was rejected.

5. If the Commission elects to publish a final rule, the comments received from SBA's Office of Advocacy will be discussed in the preamble to the final rule, unless the CPSC Chairman certifies that it is not in the public interest to do so. The preamble to the final rule will incorporate a discussion of the final regulatory flexibility analysis as approved by the Commission or a final statement of basis for the Commission certification of no significant impact, as appropriate. If a final regulatory flexibility analysis has been prepared, then copies of it will be made available to the public via the CPSC Office of the Secretary and the Commission's world wide web site.

²The provisions of Section 603 of the Regulatory Flexibility Act (RFA) of 1980 as amended, 5 U.S.C. § 603, will be used as a guide in making this determination. In addition, the November 2002 draft document prepared by The Office of Advocacy of the U.S. Small Business Administration that is titled The Regulatory Flexibility Act: An Implementation Guide for Federal Agencies will be used as a resource when preparing economic assessments and regulatory analyses of proposed rules.